The online advertising industry has grown dramatically in recent years, a reflection of the astronomical increase in Internet usage and the growing rate of commerce transacted over the Internet. As such, the efficient management of advertising campaigns has become crucial for advertisers to remain competitive and to achieve business-oriented objectives.
An advertisement over the Internet typically includes one or more textual or graphical URL links representative of the good or service the advertiser is advertising and/or proffering to sell. Clicking on the link(s) will direct the viewer to a “landing page,” generally a webpage owned and/or controlled by the advertiser, but which may also be a directory of aggregated links to other landing pages of advertisers of equivalent or similar goods or services. The advent of search engines and popular content-specific websites has further refined and focused the Internet advertising industry.
A significant portion of advertising over the internet now consists of advertisements displayed by a search engine. For example, search engines that generate a search result list from one or more user-inputted search terms (“keywords”) have been adapted to incorporate one or more advertisements featuring goods or services related to the keywords in the returned search result list. In some cases, the search result list displayed to the user features a list of one or more advertisements ranked by the search engine, typically according to the relevancy of the advertisement (or the advertisement's proffered goods or services) to the search query. Accordingly, advertisers may compete with other advertisers offering similar goods and services which may share a common keyword for position on a search result list for the keyword.
The emergence of advertisement over the Internet through the use of search engines has also expanded traditional methods of calculating advertising fees—subsequently influencing the behavior of advertising campaigns and advertising strategies. Advertisement publishers for traditional advertisement mediums, such as those displayed on physical structures (e.g., billboards) or published over media broadcasts (e.g., television and radio), typically charge rates based on the physical attributes of the occupied medium (e.g., the size or position of a billboard or newspaper advertisement) or for the duration of a discrete increment of time (for radio and television broadcasts).
Naturally, advertising campaigns for advertisements on all mediums are typically designed to maximize exposure of the advertisement to the target demographic or general public (e.g., by targeting popular television programs or sporting events, displaying advertisements along major highways or highly visible structures). However, the effectiveness of an advertisement (i.e., the consumption or heightened consumer interest in the good or service being advertised that is directly or indirectly attributable to the advertisement) over traditional advertisement mediums is extremely difficult to calculate with any amount of precision, and may actually be realized months or even years after the expiration of an advertisement campaign.
In contrast, advertisers and publishers of advertisements over the Internet, due to the ability to monitor user activity and website traffic, are able to accurately and automatically account for both increased consumption as well as presumed heightened consumer interest immediately. For example, for an advertisement displayed on a website or in a list of search results from a search engine, the publisher of the advertisement (typically the owner of the website or search engine) is able to control and track the number of times the advertisement is displayed (also known as “impressions”), as well as the number of Internet users that navigate to the landing page of the advertisement by clicking through the advertisement (the act of navigating by physically clicking on a URL link, is known as a “clickthrough”). The rate of navigating users, known as the “clickthrough rate” therefore represents the number of Internet users that navigate to the landing page of the advertisement for each display of the advertisement. A “conversion” is a term used for the number of clickthrough users that actually purchase the proffered good or service from the advertiser.
Internet advertisement publishers, and in particular the advertisement publishers which display advertisements in conjunction with a search engine, will often employ a fee structure that includes a base rate that includes incentives for each clickthrough and/or conversion generated by the advertisement. The entire fee structure is sometimes known as a “bidding price.” Advertisement publishers which employ a search engine to display advertisements may display a list of advertisements from various competing advertisers, with the list of advertisements ranked by relevancy to the search query, and perhaps adjusted to reflect the estimated revenue generated from the advertiser's bidding price (i.e., advertisers with higher bidding prices may be ranked higher than advertisers with lower bidding prices). Thus, online advertising campaigns should be able to appropriately track and accurately predict a keyword-advertisement's performance to be able to offer a competitive bidding price and to adjust their advertising campaigns to maximize future performance.
Furthermore, many search engines actively account for the number of times the search engine is queried with a search for specific terms or phrases. Some popular search engines even display the most popular (“hottest”) search queries over a given period of time (typically a month or less) to other users of the search engine. An increased number of search queries for a keyword or a sequence of keywords is typically indicative of a heightened public interest in the subject of the keyword(s). However, topics of interest may be seasonal (e.g., gifts during the holidays) or fleeting (singular event or occurrence). As such, predicting future performance becomes even more difficult due to the uncertainty or fluctuation inherent in trends.
Unfortunately, there is no conventionally known or universally practiced method of predicting future keyword performance. One employed method is through monetizing keyword bidding to approximate the value of the keyword to an advertiser and/or advertising campaign. Keyword monetization can be estimated by determining certain attributes related to advertiser-specific keyword performance. However, keyword performance fluctuates frequently, changing from day to day or even hour to hour according to “hot” trends. Accordingly, advertising campaigns which consist of ad-hoc estimations of cost and effectiveness based solely on recent keyword performance can often result in wildly unexpected outcomes.